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Dilution
Historical background The court in Intermatic, Inc. v. Toeppen, 947 F. Supp. 1227, 1236-37, 40 U.S.P.Q.2d (BNA) 1412 (N.D. Ill. 1996)(full-text). discussed the history of the dilution doctrine. Overview Under the Federal Trademark Dilution Act of 1995, the term dilution means For example, a strong, distinctive famous trademark such as KODAK could be diluted if an unauthorized party marketed an unrelated and noncompeting product such as KODAK mayonnaise. Even though a consumer may not likely be confused by the mark, the concern of dilution law is that the distinctiveness, effectiveness, and advertising value of the famous mark may be eroded and “watered down” by such usage over time, potentially affecting consumer perceptions of the company and its reputation. Dilution law thus seeks to preserve the uniqueness and strength of a famous mark. The concept of trademark dilution traces its origin to a law review article written in 1927Frank Schechter, "The Rational Basis of Trademark Protection," 40 Harv. L. Rev. 813 (1927). and has been adopted as a cause of action by many state jurisdictions, although the state laws vary in nature and extent of protection. Dilution can occur in two ways. It is a violation of the Act to "use in commerce . . . a mark or trade name if such use causes dilution by blurring or tarnishment of the distinctive quality of a famous trademark."[http://www.law.cornell.edu/uscode/html/uscode15/usc_sec_15_00001125----000-.html Id. §1125]. Dilution by blurring Dilution by blurring is the most common dilution claim. Blurring occurs when a famous mark’s ability to identify its product has been impaired due to an association in the minds of consumers arising from similarity between another mark and the famous mark.15 U.S.C. §1125©(2)(B). For example, a famous mark such as EXXON is uniformly and nearly automatically associated with the energy and petrochemical company. However, the name NATIONAL may evoke several different mental associations, such as NATIONAL SEMICONDUCTOR, NATIONAL CITY BANK, or NATIONAL GEOGRAPHIC. Dilution by tarnishment Dilution by tarnishment is the second form of dilution. Tarnishment occurs when the reputation of a famous mark has been harmed by negative associations arising from the similarity between another mark and the famous mark.Compare Kraft Food Holdings, Inc. v. Helm, 205 F.Supp.2d 942 (N.D. Ill. 2002) (full-text) (injunction barring use of King Velveeda on adult web site as dilution by tarnishment of Velveeta cheese products) to Starbucks Corp. v. Wolfe's Borough Coffee, Inc., 588 F.3d 97 (2d Cir. 2009) (full-text) (Charbucks line of high quality coffee not found to tarnish Starbucks, in fact, Charbucks may make Starbucks line more desireable). Situations in which tarnishment could result are when a famous trademark is “linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context, with the result that the public will associate the lack of quality or lack of prestige in the defendant’s goods with the plaintiff’s unrelated goods.”Hormel Foods Corp. v. Jim Henson Prods., 73 F.3d 497, 507, 37 U.S.P.Q.2d (BNA) 1516 (2d Cir. 1996)(full-text) (citations and internal quotations omitted). At issue in this case was Jim Henson’s wild boar puppet (one of his Muppets) called “Spa’am,” which according to the court was so named “to poke a little fun at Hormel’s famous luncheon meat by associating its processed, gelatinous block with a humorously wild beast.” Id. at 501. The court ultimately decided that the case presented no likelihood of dilution by tarnishment, on the basis that Henson’s use would not have caused negative associations, Henson was not a direct competitor, and “the parody is part of the product itself.” Id. at 508. Unlike a claim for traditional trademark infringement, an action for dilution does not require a showing of likelihood of consumer confusion.15 U.S.C. §1127. Federal Trademark Dilution Act To bring nationwide uniformity and consistency to the protection of famous marks from dilution, and to meet the United States’ international obligations under the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS),The TRIPS Agreement is an international agreement on intellectual property that is one component of the treaties that created the World Trade Organization (WTO) in 1995. TRIPS establishes minimum standards of protection for patents, copyrights, trademarks, and trade secrets that each WTO signatory nation must give to the intellectual property of fellow WTO members. Compliance with TRIPS is a prerequisite for WTO membership. See World Trade Organization, "Understanding the WTO — Intellectual Property: Protection and Enforcement."http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm. Congress in December 1995 passed the Federal Trademark Dilution Act of 1995 (FTDA),Pub. L. No. 104-98, 109 Stat. 985 (1996). amending Section 43 of the Lanham Act to create the first federal cause of action for trademark dilution.According to its legislative history, the FTDA does not preempt state anti-dilution laws. See H.R. Rep. 104-374, at 4 (“It is important to note that H.R. 1295 would not pre-empt existing state dilution statutes. State laws could continue to be applied in cases involving locally famous or distinctive marks. Unlike patent and copyright laws, federal trademark law presently coexists with state trademark law, and it is to be expected that a federal dilution statute should similarly coexist with state dilution law”). (Citation omitted.) Remedies Remedies available for a violation of the Act include: :(1) Injunctions.15 U.S.C. §§1116(a), 1125©(1). Under 15 U.S.C. §1125©(5), owners of famous marks may also be entitled to the following additional remedies listed below if: the mark or trade name that is likely to cause dilution by blurring or dilution by tarnishment was first used in commerce by the alleged infringer after Oct. 6, 2006; and ::(A) in a dilution by blurring action, the person willfully intended to trade on the recognition of the famous mark; or ::(B) in a dilution by tarnishment action, the person willfully intended to harm the reputation of the famous mark. :(2) For a willful violation, any damages sustained by the plaintiff, defendant’s profits, and the costs of the action.Id. §1117(a). :(3) In exceptional cases, reasonable attorney fees.Id. :(4) For a willful violation, the court may order that any infringing articles bearing the word, term, name, symbol, or device be destroyed.Id. §1118. References Category:Trademark Category:Legislation Category:Legislation-U.S.-Federal Category:Legislation-U.S.-Trademark